st: Is this peculiar, or is it me?

I entered some code into Stata and the output was not as I expected. I've pasted the log below. Note there is no dataset loaded into memory.
. do "oddcode"
. foreach item in thing1 thing2 {
2. di "item: `item'"
3. local foo "a_great_big_fish"
4. foreach var of varlist _all {
5. di "variable: `var'"
6. }
7. }
item: thing1
variable: a_great_big_fish
item: thing2
variable: a_great_big_fish
.
end of do-file
While it's questionable at best to enter the -foreach var of varlist _all- with no data loaded, I would not have expected the macro `var' to evaluate to the contents of `foo'. Can anyone tell me what is going on here?
*
* For searches and help try:
* http://www.stata.com/support/faqs/res/findit.html
* http://www.stata.com/support/statalist/faq
* http://www.ats.ucla.edu/stat/stata/